News about mortgage loan modification

The real estate market, to a large extent, continues to slumber. Note, for example, the weak mortgage applications indices to the left, suggesting very little movement. At the same time, though, we continue to see evidence that the overall economy and, in some regions, even the real estate markets, are improving. But gradually, and unevenly—giving us good news, but not great news.



There was, for example, very little movement among interest rates over the past week. Mortgage rates declined by about 4 basis points in most cases, and Treasury securities yields were down by less. The calm in this market seems sustained by, on the one hand, a slowly growing confidence among investors (which will eventually lead to higher rates) and, on the other, continuing concerns that the credit markets may be rocked by the debt problems in the euro zone. For this latter reason, world investors continue to flock to the relative safety of American Treasury securities, and interest rates, in heavily-bid auctions, remain low.

Meantime, the weekly report on unemployment insurance claims continues to give us a slight decline—5,000 fewer new claims each of the past two weeks, for example. This is not great news, but it is good news, a salve to any remaining worries that we might see further job losses.

The Conference Board Index of Leading Indicators advanced again in February, but this time by only 0.1%. “The leading index suggests that the recovery is maturing and the economy will settle into a slower pace of growth for the second half of the year,” explains Michael Bratus of Moody’s Again, good news but not great news.

Lastly, to the moment of writing this update, the report on Existing-Home Sales shows a 0.6% decline in the number of sales from January to February of this year. What is good here is that the decline has not appreciably deepened since the extraordinary drops in December and the striking decline in January. What is far from great, though, is that we really haven’t recovered our sales volume in real estate resales since the big declines.

We do, however, have stronger sales in some markets, notably California. And we have a company like FedEx—whose shipping and delivery business rises and falls on the strength or weakness of world markets—reporting fiscal third quarter profits that more than doubled those of last year. And that, it turns out, is great news. We expect more great news, but it will probably continue to come gradually and unevenly.

March 24, 2010

KEY INDICATORS [3/23/10 close]

Gold $1101.80/ounce [down]
Crude Oil (Brent) $80.43/brl
[up slightly]
U.S. Dollar to…
    Euro .7407 [up]
    Japanese Yen 90.40 [down]
6-mo Treasury Bill Yield 0.22%
10-yr Treasury Note Yield 3.66%
[6-mo down 1 bp, 10-yr down 2 bps]
11th Dist Cost of Funds 1.786%[-]
30-yr Fixed-rate Mortgage 5.30%
15-yr Fixed-rate Mortgage 4.77%
1-yr ARM 4.57%
[HSH averages rates: 30-yr
down 4 bps,15-yr down 4 bps; 1-yr ARM down 21 bps]

Mortgage Bankers Association Mortgage Applications Index
week ending 3/12
    620.9 (down 1.9%; up 0.5%
the week prior)
  Purchase Money Loans
    221.5 (down 2.3%; up 5.7%
    the week prior)
  Refinancing Loans
    2955.9 (down 1.7%; down 1.5%
the week prior)

Jobless Claims 3/13
    457,000 – prior week 462,000 – continuing claims rose to 4.579 m

Producer Price Index (PPI) Feb
    Down 0.6% - core (with food & energy prices removed ) up 0.1%

Consumer Price Index (CPI) Feb
    Unchanged – core up 0.1%

Last changed: Mar 23 2010 at 10:59 PM

News about mortgage loan modification

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